SPRINGFIELD — What was supposed to be the time and place to act on Illinois’ massive pension debt has turned, instead, into two days of focusing instead on gun control and gay marriage.
By Benjamin Yount | Illinois Watchdog
SPRINGFIELD — What was supposed to be the time and place to act on Illinois’ massive pension debt has turned, instead, into two days of focusing instead on gun control and gay marriage.
An Illinois Senate committee passed a single, minor piece of pension legislation Wednesday, but otherwise there has been little action and little talk about Illinois’ massive pension debt.
“The Senate has already voted on a proposal; we sent that over last May,” said state Sen. Mike Noland, D-Elgin. “If the people of the state of Illinois are wondering if anything can be done, that answer will come from the House.”
Noland said House members have pitched a plan to require more from teachers and local school districts or local governments, coupled with benefit reductions. The Senate cannot vote on that plan unless — and until — it passes the House. The Illinois House is not scheduled to be back in Springfield until Sunday.
But different schedules or procedural hurdles have not stalled pension reform, according to state Sen. Matt Murphy, R-Palatine.
“From the top down, frankly, Gov. (Pat) Quinn has not led on the issue,” Murphy said Thursday. “The Senate president and speaker of the House continue to fight about how this pension fix should come to pass. And the truth is, Rome burns while they fiddle.”
Illinois owes between $90 billion and $130 billion for its five publicly funded retirement systems.
Quinn has urged action before Jan 9, when a new Legislature is sworn in.
State Sen. Kwame Raoul, D-Chicago, said that’s probably not going to happen because, to truly “fix” Illinois’ pension systems, there has to be an agreement on the rest of the state’s finances.
“We have to discuss the expiring income tax (increase),” Raoul said. “We have to discuss the budget overall, and overall tax reform. I think we have to discuss that we are one of the few states that doesn’t have a progressive income tax.”
Hundreds of current and retired public workers, many of whom are opposed to the cost shift, flooded the Illinois Capitol today to urge lawmakers to “do something” about the state’s pension woes.
Bonnie Lartz, a middle school teacher from Moline, said doing “something” doesn’t mean doing nothing.
Lartz said you just can’t keep “borrowing and waiting, borrowing and waiting.”
Lartz said she would be willing to accept pension reforms that give public employees a choice to pay more or accept a reduced pension, but Illinois’ biggest unions say the solution is to tax corporations and handcuff the Legislature to a requirement to fully fund pensions before looking at benefit reductions.
Noland said the delay in pension action is likely a matter of a month or two, and not a session or two.
“The numbers are just crushing at this point,” Noland said. “By the time February and March come around … our continued burden and the amount we pay on a monthly basis is going to increase exponentially.”
Murphy, the Republican, said lawmakers already know what they will be voting on.
“This has all been out there. And it’s been out there for years,” Murphy said. “The question is, when will the leadership down here have the political will to do what needs to be done?”
Contact Benjamin Yount at Ben@IllinoisWatchdog.org
Handcuff the legislature?
The reason we are in this pension mess is because the legislature did not fully fund the pension requirements for years and years.
Why would any worker agree to any Constitutional change regarding their pensions without a State law requiring that the state will do what they should have done all along — fund the pension each and every year.
Without that, no employee contribution increase can be allowed, no diminished benefits and no loss of health care. Current proposed legislation only penalizes workers for the failings of all elected State officials the last 40+ years.
This is a revenue problem and always has been. Sales tax base doesn't include the large majority of the economy — services. Lower the rate and expand the base. This helps low income families.
Additionally, 5 percent income tax rate is very low compared to other nearby states. Raise the exemption levels for the state income tax to protect low and middle class incomes and raise the rate again to 6 percent. Corporate welfare must stop in Illinois. Cut income tax loopholes for large corporations and increase incentives for hiring more workers.
How about this
The state of Illinois has way to many employees and way to many levels of goverment. In fact, Illinois has nearly twice the number of government organizations as the next state. Also, if you eliminate unneeded state workers, you might be able to solve the pension mess. Does Madigan really need 32 people working for him.
The problem is that union leaders and political leaders have been washing each others hands for years. Political leaders have been providing the unions with jobs and unions members have been providing the politicians with the votes to get them re-elected.
Another real question, why does the state allow unions to control public sector jobs. It doesn't seem right or honest
State workers
It's true that Illinois has too many government agencies — too many school districts, regional state schools boards, etc . However, the State of Illinois has fewer workers per capita than almost any other state. That's right… fewer workers per capita.
Proper funding of the pensions was, and is, the only issue here. Make the required payments each and every year and voila….no pension mess.
Now there is a pension funding problem because the State didn't pay the required amount each and every year (See Chicago tribune op-ed).
Proposals submitted want to punish workers and retirees who pay/paid from every paycheck their full pension contribution into the system( most whom don't and won't get Social Security by the way). This is so wrong.
Any constitutionally legal change couldn't change the benefits earned, reduce the COLA, or increase retirement age of current employees and retirees. A Tier 3 for new hires could institute those proposed changes, but only for ne hires.
Thank you!
Thank you for reminding folks about the truth re: number of state employees. This forum itself even pointed this out: http://evanstonnow.com/story/government/bill-smith/2011-12-21/46892/ap-illinois-has-fewest-state-workers-per-capita
Duplication and waste of government resources is the real culprit behind the pension budget crisis. The comment above is correct–what Illinois has is a budgeting problem, not a pension problem. Had the proper funding been utilized over the past 30+ years, there would be no shortfall. Short-term, politically-expedient benefits were exchanged for long-term pain and instability, and those bills have finally come due.
Some controls do need to be put in place: i.e. pensions awarded to those who did not earn them, or exhorbitant benefit spikes to high-ranking employees. But, the vast majority of pension earners collect only modest incomes, and frequently without Social Security or healthcare benefits.
Pensions back, but schools need to pay
Well there is a revitalized effort to address pensions, but the current proposal drops the cost shift of retired teacher's pensions cost to the school districts. This is the largest problem the pension program is facing, and without this inclusion, any headway is trivial. There is no reason for the State of Illinois to have to pay the retirement costs of someone who was never employed by the state, nor decided what their salary would be.
These issues belong to the school districts, and it would help to keep them in check to prevent these end of career pay raises.